SENATE BILL REPORT

SB 6014

BYSenator Fleming

Requiring sports teams to maintain interest-bearing accounts for season ticket proceeds.

Senate Committee on Financial Institutions & Insurance

Senate Hearing Date(s):February 28, 1989

Senate Staff:Walt Corneille (786-7416)

AS OF FEBRUARY 27, 1989

BACKGROUND:

Seattle is the home of three major sport franchises, the Seattle Mariners, the Seattle Seahawks, and the Seattle Supersonics.  These professional sports teams all engage in the sale of season tickets.  When season tickets are purchased, a portion of the cost of the season ticket must be paid in advance.  The full cost may be paid in advance.  When advance payment is made for season tickets, the professional sports team has possession of funds in advance of the actual use of the tickets purchased.

It has been suggested that interest could be earned on the proceeds from the sale of these tickets and used for an appropriate public purpose.  In 1986 the housing trust fund was created to provide a continuously renewable resource to assist low- and very low-income citizens in meeting basic housing needs.  The director of the Department of Community Development oversees the housing trust fund.

SUMMARY:

Professional sports teams are defined as the Seattle Mariners, the Seattle Seahawks and the Seattle Supersonics.  All professional sports teams must maintain an interest-bearing account for the deposit of proceeds from the sale of season tickets.  The interest on these accounts after reasonable transaction costs must be paid to the State Treasurer for deposit in the Washington housing trust fund.  A professional sports team is not required but may notify buyers of season tickets of the use of these funds.

The interest accrued must be calculated on an average monthly balance of the account where the funds are deposited and must be paid at least quarterly to the State Treasurer for deposit in the housing trust fund.  A statement must be made to the director of Community Development indicating the total amount of the proceeds deposited, the rate of interest, the amount of service charges deducted and the account balances for the period of the report.

Failure to comply with the act is punishable by a fine not exceeding 10 percent of ticket sales during the year in which the violation occurs.

Appropriation:    none

Revenue:    yes

Fiscal Note:      requested